Germany’s Covestro enters ‘concrete’ takeover talks with Adnoc

German chemicals firm Covestro said on Monday that it had agreed to enter into "concrete negotiations" Abu Dhabi National Oil Co based on a potential €62 per share starting proposal.

"Based on the open-ended talks held so far with Abu Dhabi National Oil Company (Adnoc) the board of management of Covestro AG after consultation with the supervisory board has today decided to enter into concrete negotiations with Adnoc regarding a potential transaction and the potential conclusion of an investment agreement as well as to allow for an adequate exchange of company information to confirm assumptions (confirmatory due diligence)," it said

Covestro said the discussions so far have shown that both parties "can generally reach a common understanding" over core aspects of a possible deal, including support for Covestro’s further growth strategy.

The starting point for the negotiations is a possible offer price of €62 per Covestro share that Adnoc has indicated to Covestro.

"We have made good progress in our discussions with Adnoc. Therefore, we have decided to enter into concrete transaction negotiations with Adnoc," said Covestro chief executive Markus Steilemann.

"Adnoc and Covestro both intend to proceed with the negotiations about a potential transaction and the confirmatory due diligence in a timely manner," Covestro said.

"At this time, there is no certainty whether the upcoming negotiations will lead to an agreement. There is also no certainty as to the final terms of any such agreement."

At 1140 BST, Covestro shares were up 6.8% at €54.74.